A ruling was issued recently by the Shenzhen Court of International Arbitration stating that there is no prohibition against Bitcoin ownership and transfer in China. Bitcoin and other cryptocurrencies are not legally regarded as property in the country, despite the ban on ICOs and virtual currency trading.
The ruling was issued by the court in a case that was brought before it showcasing a dispute over a contract involving transferring cryptocurrencies. An agreement was made by the plaintiff and the defendant where the latter individually managed a cryptocurrency portfolio on behalf of the former, according to the details of the case.
The portfolio of cryptocurrencies under management includes 20 Bitcoin, 50 Bitcoin Case and 13 Bitcoin Diamond; all having a combined value of more than $490,000. The plaintiff, however, accused the defendant of falling short on the deadline that was agreed upon in returning the cryptocurrencies.
On the other hand, the defendant stated the ban by the country’s apex bank, the People’s Bank of China, on ICOs and virtual currency trading meant that cryptocurrency payments are illegal. This would make the earlier mentioned contract invalid.
While defending the argument, the defendant went further on to state that the ban removed all trading avenues which would facilitate the transfer of cryptocurrencies back to the plaintiff as stipulated by the contract.
The court responded to the defendant saying that the September ban did not cover private transfers of Bitcoin and other cryptocurrencies. In addition to this, the arbitrator stated that there was no need for external platforms on part of the defendant to return the virtual currency assets as long as both parties had wallets and private keys.
Upon delivering its verdict, the arbitral tributed ordered the defendant to pay a sum of $401,780 to the plaintiff on grounds of breach of contract. The court did not approve the request for payment of interest on part of the defendant since no monetary authority in the land issues cryptocurrencies.
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